Fresno's bitterly-fought licensing process
In May 2021, social equity applicant George Boyadjian wrote to Fresno’s (Kern Co.) mayor and city council. He had a problem with a former LA Dodger and a former NBA player applying for social equity licenses in the city. “When these athletes were enjoying professional sports careers,” Boyadjian wrote, “People like me were in court battles with cities like Fresno over the ability to operate a cannabis business.”
Days later, a city official responded: Boyadjian’s application had been rejected. By writing to city leadership, the official wrote, Boyadjian had violated Fresno’s cannabis ordinance, which prohibits contact between applicants, applicant business owners and elected officials “concerning or touching upon any matter which is the subject of this article.”
It was a devastating blow to the longtime cannabis activist and entrepreneur. In an editorial, he wrote that the city’s requirement that social equity applicants have $400,000 in cash on hand is “not equitable.” (The city calls it a recommendation, not a requirement.)
Boyadjian is one of several applicants embittered by what they see as the city’s opaque and unfair licensing process. At least three unsuccessful applicants have open lawsuits against the city, which has called them without merit in court filings.
As the city’s first dispensary prepares to open, the process has become engulfed by litigation, insinuation and rancor.
A big prize
Nearly 100 pot shops reportedly applied to hang their shingle in Fresno.
It’s one of the California market’s biggest remaining prizes. With a population a bit over 500,000, Fresno is the state’s fifth largest city, and the biggest without a dispensary. It’s decision to limit the number of pot shops to 21, and its relative geographic isolation — a two hour drive east of Monterey Bay — makes it especially attractive.
The city’s licensing process has been long, dragged out and in recent months mired in litigation.
Fresno voters overwhelmingly approved Measure A to regulate the industry in fall 2018. But the city didn’t begin accepting applications until late 2020, two years later. The city planned to award 21 total dispensary licenses, three for each city council district, including no more than six social equity licenses. A few months after disqualifying applicant Boyadjian for his letter, Fresno announced the preliminary winners in August and September 2021.
Defeat, then victory
After the results were announced, former Major League Pitcher Matt Garza, who had been connected to two unsuccessful applications told local news site GV Wire, “that might be something there” between a “city hall insider” consultant who worked with Cookies to secure three preliminary licenses, including one for its sister brand Lemonnade.
- At the time, consultant Kacey Auston responded to the insinuation by saying she had rightfully earned the licenses.
- Cookies lost one of the three Fresno licenses in the appeals process.
Later, in February 2022, Garza’s two projects won approval through the appeals process. According to the applications, he has a 19% stake social equity venture Beyond Rooted, and 51% ownership of a standard venture in partnership with Shryne Group, the retailer and parent of vape brand Stiiizy.
(Whether or not Boyadjian is right that partnerships between wealthy investors and low income social equity applicants are inequitable, they have become fairly common in California. Former NBA star Al Harrington’s Viola Brand won another social equity license in Fresno.)
- This April, the San Joaquin Valley Sun obtained a brief email Garza had written to Fresno Mayor Jerry Dyer (R) in September. In it Garza appeals the decision to reject the Shryne project’s application. “It certainly looks” like Garza had broken the rule that got Boyadjian rejected, the paper reported.
- In a statement to WeedWeek, City of Fresno spokesperson Sontaya Rose said the municipal code allows contact between applicants and officials over an appeals process, and that Boyadjian had been disqualified because his letter was not part of an appeals process.
- At least one applicant that’s suing the city interpreted the municipal code differently. In a court filing, SoCal-based Catalyst noted that it had no choice but to sue since Catalyst “had and has no right or ability to appeal.”
LA-based The Artist Tree anticipates opening Fresno’s first dispensary in June. It’s also suing the city over a second unsuccessful application.